The mid-to-late 1990's saw a period of strong growth for the commercial property market. This acceleration in commercial building activity was fuelled by the expansion of major retail centres and the construction of large scale entertainment complexes across Australia. The most notable activity in this period was building associated with the preparations for the 2000 Olympic Games.
The early 2000's saw a contraction in the commercial and industrial building market and a reduction in commercial property investment, as a result of the completion of much of this building activity and a less favourable investment environment. The downward trend and contraction of the industry continued during 2000-2001, with key contributory factors including the steady rise in domestic and global interest rates during 2000; and a general weakening in business confidence, and concerns surrounding the introduction of the New Tax System.
From 2001-2002 the industry saw an increase in activity, fuelled by solid employment growth and work on several landmark developments. However this period saw a number of events that would affect the construction industries in all States for a number of years to come. The level of industrial activity was volatile and this period saw the start of a global insurance crisis, stemming from the collapse of several international insurance companies.
By 2002-2003 and continuing through to December 2006, all sectors of the industry had returned to solid demand conditions. With several large scale projects dominating activity and coupled with a rise in industry direct employment, a continuation in favourable investment conditions, strong growth in total employment, high company profits and supportive consumer spending, the pace of growth in the value of the commercial and industrial building activity remained strong and looks likely to experience further robust growth.
| VIC | NSW | QLD | WA | TOTAL | |
| 2000 | 29% | 34% | 18% | 9% | 90% |
| 2001 | 31% | 31% | 17% | 9% | 89% |
| 2002 | 29% | 34% | 19% | 8% | 90% |
| 2003 | 31% | 31% | 18% | 8% | 88% |
| 2004 | 29% | 33% | 20% | 9% | 91% |
| 2005 | 26% | 29% | 22% | 9% | 87% |
| 2006 | 27% | 27% | 25% | 9% | 89% |
Source: Australian Bureau of Statistics
As indicated in the table approximately 90 percent of non-residential building activity across the nation occurs in New South Wales, Victoria, Queensland and Western Australia.
The Building Industry Comparative Index (BICI) compares outcomes across those States where investors' attention is primarily focused.
